Market Reports

Retail Development, Design Trends are Reshaping the Industry

by Haisten Willis December 11, 2015

Convenience, quality and experience are the key deliverables for today’s retail customer. Make it easy, of high value and enjoyable. Today’s shopper has less time, less money and less patience for retailers and developers to “get it right.” They want shopping to be an event and a social experience. They want a reason to get off the couch and go shopping instead of simply buying online. Although e-commerce still accounts for less than 15 percent of retail sales in the United States, it dramatically impacts consumers’ expectations and will increasingly influence retail trends. Shoppers are better informed, often having thoroughly researched the options and narrowed their choices before ever setting foot in the store. Salespersons must be better informed and prepared to successfully engage sophisticated consumers. Sales of consumer goods perceived to be commodities, some of which include books, electronics and office supplies, are continuing to migrate online. Retailers who are able to seamlessly integrate their brick and mortar stores with their online presence have been able to take advantage of shifting trends successfully, while those who haven’t struggle to compete. Omni-channel retailing is becoming more mainstream. Retailers that haven’t adopted omni-channel retailing are racing to catch up to businesses …

December 11, 2015

Indiana Market Reports Midwest Midwest Market Reports Office Uncategorized

Office Development, Tenant Demand Heat Up in Northern Suburbs of Indianapolis

by Christina Cannon December 10, 2015

The office sector in the northern suburbs of Indianapolis shows clear signs of solid growth and stability with new construction and deeper tenant demand for space, particularly in the Class A segment. A number of factors contribute to this trend, including job growth, availability of land for housing and favorable demographics. Decision-makers live in the northern suburbs along with families, empty nesters and educated workers. Nearly 90 percent of all suburban office space in greater Indianapolis is located north of 71st Street in five key submarkets: North/Carmel, Keystone, Northwest, the Fishers/I-69 Corridor and Northeast/Castleton. Five I-465 interchanges define these five northern suburban office submarkets of Indianapolis, providing workers efficient access to 17.5 million square feet of office space. Through the third quarter of this year, overall occupancy in these five suburban submarkets stood at nearly 85 percent. The occupancy rate for Class A space was considerably higher at 89 percent. There are only seven blocks of contiguous office space 100,000 square feet or greater available in the suburbs and downtown — four of which are located in the northern suburbs. These spaces include 133,000 square feet at Two Concourse, 10194 Crosspoint Blvd.; 113,000 square feet at the former Charles Schwab …

December 10, 2015

Market Reports Western Market Reports

A New Demand for the IE’s Office Market

by Nellie Day December 8, 2015

Things have been steadily moving forward in the Inland Empire office market. Consistently the fastest-growing, non-farm job market in Southern California, the region’s exceptional growth in professional and business service positions provides a compelling reason for investors to view this office market as opportunistic. There is a high demand for Class A and B property investments. We are also seeing overseas buyers, mostly from China, showing interest in the region. Unlike Los Angeles and Orange County, which have been popular with foreign investment for the past several years, this is a new trend for the Inland Empire. It also suggests global investors are looking to the region as an attractive alternative to some of the pricier Southern California markets. The Inland Empire is now on the map. The good news is there is still room to add value by leasing up vacant space and realizing future rent growth. We have recently seen many investors buying risk-oriented projects, anxious to secure some of these affordable assets before rates and pricing rise. Some of the strongest submarkets for leasing and investment are the CBDs of Corona, Riverside, Rancho Cucamonga and Temecula, as well as the Ontario Airport area. There is a high …

December 8, 2015

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond’s Industrial Market Fires on Most Cylinders, Save for Large Spec Projects

by John Nelson December 7, 2015

Greater Richmond’s industrial market is as strong as it has been in a generation. Given the overall growth of the economy, including industrial employment and investment, it appears that the engines driving industrial economic growth will remain steady and the need for industrial real estate will continue to be steady. Greater Richmond’s industrial market is moving fast and on most cylinders, with the only laggard being pure speculative development of high-bay large block industrial and small incubation flex product. All other cylinders are pumping, including industrial and flex leasing, design build-to-suits, land sales, freestanding occupier building sales and investment sales. Absorption and general growth activity is coming not only from local existing companies and start-ups, but also by companies outside of the area looking to relocate or open additional facilities here. The flavor of the demand has been relatively diverse reflecting the Greater Richmond area’s stable economy and Mid-Atlantic location with its superior logistic opportunities. Economic Trends Greater Richmond’s population is nearly 1.3 million people, and total employment is more than 650,000 in the Richmond metro area. The diverse economy includes 10 Fortune 1000 headquarters; pharmaceutical, chemical, biotech and other 21st century manufacturers; financial and information technology services; Fifth District …

December 7, 2015

Industrial Market Reports Multifamily Office Retail Texas Texas Market Reports

Tremendous Growth Underway in the ‘Twin Cities’ of Texarkana

by Haisten Willis December 4, 2015

It has been a tremendous year for the Twin Cities of Texarkana, Texas and Texarkana, Ark. with the education sector topping $70 million and a $180 million major medical campus projected to commence in early 2016. Educational Opportunity Texas A&M University-Texarkana has been awarded $35.5 million in state funding for the construction of a new building to house and expand its nursing program, including the expansion of a Master’s Degree program, and to promote student success initiatives. The Texas A&M University system expanded its four year-university program to Texarkana in 2010, with the first freshman class admitted that year including Phase I dorms on the 300-plus acre Bringle Lake Campus. University of Arkansas Community College at Hope (UACCH) expanded a satellite campus on Texarkana’s Arkansas side in 2012, with over $5.4 million going toward the construction of two buildings that service over 300 local students. Working hand in hand with the University of Arkansas at Little Rock, UACCH has expanded their four-year university program, and will continue to grow as the new health professions building completes construction. Further education initiatives include a $29.2 million commitment from Texarkana Independent School District for the construction of a new sixth grade center and …

December 4, 2015

Market Reports Massachusetts Northeast Northeast Market Reports Retail

Boston’s Battle of the Grocers

by Jaime Lackey December 2, 2015

While demand for all types of retail product has been strong over the past few years, investors continue to have a strong appetite for Boston area grocery-anchored shopping centers in 2015 despite meaningful changes to the food distribution industry. The competitive landscape for traditional supermarkets is evolving as value-oriented grocers such as Market Basket, Walmart, Trader Joe’s, Aldi, and Save-A-Lot lure away price-conscious customers, while service-oriented formats such as Wegmans, Whole Foods and Roche Brothers are expanding and gaining market share with more affluent customers. These chains achieve success by targeting the low- and high-end niches of the market. According to IBISWorld, the online grocery sales industry is projected to increase approximately 9.5 percent annually to become a $9.4 billion industry by 2017. Companies such as Amazon and Walmart are increasing their capabilities for selling food and beverages online, and Ahold’s Peapod service continues to expand in an effort to maintain its position as the leading Internet grocer. The food distribution industry has been further saturated by big-box retailers and national pharmacy chains offering a growing selection of packaged goods and dairy products. These non-traditional grocers and e-commerce providers derive much of their profits from non-food items, allowing them to …

December 2, 2015

Market Reports Western Market Reports

Seattle Tech Boom Creates Next-Generation, Culture-Focused Campuses

by Nellie Day December 1, 2015

Developers are doing everything they can to make their projects attractive to corporations and their brokers as competition in Seattle continues to increase for high-growth tech tenants. And they’re doing it with good reason: Seattle was recently ranked the No. 1 city in the country for technology jobs. Seattle’s tech industry has grown by 12 percent over the past two years, according to Forbes, outpacing Silicon Valley, Boston and other tech markets. Experts point to a diverse local economy – Microsoft, Amazon and Boeing – and more-affordable housing that, together, enabled Seattle to fare better than other technology hubs. With tech business booming, Seattle’s real estate market is simply trying to keep up. Projects are starting every week, it seems, by developers looking to capture the unprecedented supply of tech businesses. Some are trying to attract anchor tenants with equity, naming rights or aggressive TI allowances. No matter the approach, smart owners realize their buildings must be created in a way that enables tenants to gain a competitive advantage in attracting top industry talent. Surveys show culture is by far the biggest draw when it comes to recruiting and retaining tech workers. How a company’s owners and employees think, feel …

December 1, 2015

Market Reports Retail Southeast Southeast Market Reports Virginia

Grocery Stores, Restaurants, Fitness Are Driving Richmond’s Retail Market

by John Nelson November 30, 2015

This year is shaping up to be very exciting and productive for the Richmond retail market. The Richmond retail market has started at a brisk pace for the first half of 2015, similar to the end of 2014 as it absorbed 111,889 square feet. The vacancy rate has continued to decline over the past 12 months as well. The overall retail vacancy rate in Richmond tightened to 6.6 percent, a 50 basis point improvement over last year. The main drivers of retail activity throughout the Richmond MSA continue to be grocery stores, fitness centers and restaurants. Early this year we saw the commencement of construction at two Wegmans-anchored developments in Richmond, one in Short Pump and another in Midlothian. The Midlothian Wegmans will anchor the new Stonehenge Village and is on pace to open in early 2016. The Short Pump Wegmans will join Cabela’s in the new West Broad Marketplace, a 400,000-square-foot development on the western edge of Short Pump. There has also been solid activity in the market from several other grocers, including Walmart Neighborhood Market and Aldi. Each of these concepts has opened four new stores in the market. Another grocer poised to enter the market is LIDL, …

November 30, 2015

Market Reports Multifamily Southeast Southeast Market Reports Virginia

Richmond’s Multifamily Market Couldn’t Look More Attractive to Investors

by John Nelson November 23, 2015

The Richmond metropolitan area, with a population of 1.3 million, is bursting with multifamily development. The growing MSA contains more than 72,000 apartments units (45 percent Class A) and has 2,018 units under construction with another 5,826 in various stages of pre-development. On top of all this activity, the overall market occupancy remains at 96 percent. The fuel for these conditions comes from the many amenities in the market, from the University of Richmond and a robust sports scene to the proximity to Atlanta, the Atlantic coast and Washington, D.C., as well as the encouraging employment picture. The city’s unemployment stands at 5 percent compared to the U.S. average of 6.3 percent; since 2000 the city’s population has grown by nearly 15 percent. These conditions allow property owners to leverage this diverse and sustainable market for multifamily investments. Richmond development also benefits from the attractive interest rates, which remain low despite having climbed 80 basis points since late January. Along with monitoring this upward trend, news earlier this month from the Federal Reserve of a rate hike will serve as a caution sign for investors. Whether we see this hike in the next couple of months, or not until 2016, …

November 23, 2015

Market Reports Multifamily Office Texas Texas Market Reports

San Antonio Wins the Race with Consistency, Diversified Economy

by Haisten Willis November 20, 2015

The story of the tortoise and the hare can be used to describe the major metros throughout Texas. In recent years, Austin has sprung to life while San Antonio has developed slow and steady. Most recently, however, it appears San Antonio’s office market has received a jolt — the second quarter of 2015 saw three to four times more activity than historic averages indicate — and San Antonio now boasts its lowest vacancy rate since 2008. With a 3.4 percent unemployment rate, San Antonio ranks third on the list of major metropolitan cities across the country with the lowest unemployment rates, trailing only Austin at 3 percent and Salt Lake City at 3.1 percent. These numbers are indicative of a much larger picture of San Antonio. Uniquely positioned to capture the spillover of tech companies and supporting businesses from Austin, its neighbor, San Antonio’s low rental rates for both Class A and B office space along with stable infrastructure make it a viable, attractive alternative for many major businesses looking to expand. But where in San Antonio is all this activity erupting? San Antonio’s newest residents are interested in one area, and you need look no further than the central …

November 20, 2015

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